Case Studies Show "Marginal" Added Cost to Developers Who Select Sustainable Materials

This article is adapted from gated content published by Construction Week Middle East on Feb. 25, 2025. Subscribers can sign in to view the original article and video discussion here.

CW Green Infrastructure Summit 2025 brought together top industry experts to explore how AI, smart technologies, and digital transformation are redefining construction in the Middle East. The conference featured thought-provoking panel discussions, fireside chats, and presentations.

The conference opened with a dynamic panel discussion on scaling greener concrete and sustainable materials. Moderated by Zulema Cerdá Sanchis from Accuracy, the "Sustainable Construction Materials: The transition to greener concrete" panel featured Fahad Siddiqui from AMAQ, Hussam Ali from ROSHN, and José Barquero from CRDC GLOBAL, and explored regulatory hurdles, supply chain challenges, and the role of collaboration in achieving national goals established by Saudia Arabia's ambitious Vision 2030.

The panel discussion focused on the transition to greener concrete and scaling sustainable construction materials. A key highlight was CRDC Global’s RESIN8™ technology, which showed that adding recycled plastic to concrete increased costs by just 0.11%, while offering significant environmental and durability benefits.

The discussion emphasized that sustainability is not just about regulatory compliance but about creating long-term value.

A complete transcript of the panel discussion is below. Subscribers to Construction Week can login to view a recording of the event here.

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TRANSCRIPT

"Sustainable Construction Materials: The transition to greener concrete"

CW Green Infrastructure Summit 2025, Feb. 25, 2025

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Moderator:

·      Zulema Cerdá Sanchis — Director, Accuracy

Panelists:

·      Fahad Siddiqui — CEO, AMAQ

·      Hussam Ali — Director of Modern Methods of Construction, ROSHN

·      José Barquero — Chief Commercial Officer, CRDC Global

Zulema Sanchis:

In today’s panel discussion about green construction, we are going to talk about green cement, apart from other methods modern methods of construction. I don't like to call them modern anymore, because they should be the ones that we should be using, right? So yesterday, flying into Riyadh, I was reflecting on Saudi Vision2030, and for me—I don't know about you guys—but for me it isn't about just the economic transformation. It’s about how we are reshaping the way we build, right? And when I look at the construction industry—and I think we all agree—we are the highest emitting industry in the world, and especially concrete—you know, it’s the largest contributors to carbon emissions, around 8%, and also to landfill waste.  And then, on the latter, Saudi Arabia’s ambitious targets for 2030 is to divert 95% of the waste from landfill —which is, I don't know about you guys, but it's a massive target they need to reach by 2030: 95% landfill diversion. So I think the way forward is very clear: we need to rethink, especially, materials and the way we build.

So today, as Julian said, we are going to talk about how we can balance performance and cost, while integrating sustainable materials. What are the biggest challengesin transitioning to greener concrete, and how can we overcome them? And most importantly, for me, is the collaboration part, right?  How can developers, contractors and suppliers collaborate to scale up sustainable materials and sustainable modern methods of construction?

So we have here with us these three great gentlemen: So let's start with José. José Barquero, chief commercial officer at CRDC Global, who is transforming plastic waste into a valuable construction material called RESIN8™, contributing to a circular economy. I hope you explain a little bit more about this this morning. Thank you very much for being here, all the way from Costa Rica, by the way.  

Then we have Hussam Ali, director of modern methods of construction at ROSHN, leading the way in sustainable community development and offsite construction.  And we have Fahad Siddiqui, CEO for AMAQ, pushing for sustainable real estate development while, I will say, balancing the cost, performance and regulatory requirements. What I learned about you, Fahad, is that you are here a contractor, and back in UAE you are a developer, so you are wearing both hats, and this is going to be very handy.

Fahad Siddiqui:

Best of both worlds.

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Zulema Sanchis:

OK, that's good. Right! So let's crack on with it, OK?  So how we have structured the panel today is based on three main topics. The first topic that I would like to address is understanding the landscape, and Jose we’ll start with you. Coming back to my reflection flying in yesterday, about Saudi Vision 2030 for 95% landfill diversion, and a major reduction in carbon emissions in construction, the embodied carbon.  Knowing that, and given CRDC’s work in turning plastic waste into construction material, how does RESIN8™ contribute to these goals, and what are the challenges that you have faced in expanding into new markets?

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José Barquero:

OK. Hello, everyone. I'm very honored to be here and sharing the stage with all of you. CRDC closely aligns to Saudi Arabia's Vision 2030 by manufacturing a product we call RESIN8™. We use plastic polymers recovered from waste streams, and by doing so, we actually help to divert a lot of waste that can be ending up in landfill or polluting the environment, and also we help by reducing the dependency on imports and mining.

So just to explain a little bit more about RESIN8™, basically we get all the plastic waste as a raw material and we give it a functional and economic value by converting it, forming it into a lightweight synthetic aggregate. It actually looks exactly the same as a natural aggregate, and it performs the same. So when you think about the entire sustainable benefits, it’s not about trade-offs, you know? The product actually has the same technical performance, and it improves concrete and asphalt. When we talk about concrete, it actually makes the concrete —well, first of all it looks exactly the same, as I said before. It also makes it much more insulating. It makes it durable. It makes it lighter, so for transportation, there's a cost saving around that.  And when we talk about asphalt, it makes roads last longer and require less maintenance, so immediately you get a reduction in the embodied carbon.

Basically we get all the plastic waste as a raw material and we give it a functional and economic value by converting it, forming it, into a lightweight synthetic aggregate. It actually looks exactly the same as a natural aggregate, and it performs the same. So when you think about the entire range of sustainabillty benefits, it’s not about trade-offs, you know? The product actually has the same technical performance, and it improves concrete and asphalt. — José Barquero, CRDC Global

And the second question was around challenges to adoption. The adoption of this technology in new markets, it's often steamed by regulatory approvals, and also supply chain logistics, and—I think everyone can relate with this—just the resistance of people to making the change.  So, we worked very closely to governments and regulatory bodies, and we work through these markets also hand in hand with industry leaders. So Saudi Arabia, actually, is not the exception, and by the Vision2030, it makes it a very interesting environment for us with this technology.

Zulema Sanchis:

So I just want to summarize it:  the waste of one industry becomes the input to another industry, which I think is a great value proposition for Saudi Arabia right now, especially with the Vision 2030 that we mentioned. Also, I don't know if you explained, that you are already in four countries, so it's very scalable, the operation is very scalable, and the technology is proven already, you know. I think it would be great to expand a little bit on that before we move into the next question.

José Barquero:

Absolutely. We have our global strategy we call our 20x20 Vision and it's basically establishing 20 plants in 20 different cities in the world. We have specific criteria we look for in those key markets. And each one of the plants, we want to have the annual capacity of processing any type of plastic waste, up to 20,000 tons. So we want to have a footprint established of 400,000 tons annually, and we are building this expansion by a JV model. So as we look into these new markets, we go and work it out with local partners. Right now we already have four plants in the world. We have one in Costa Rica, one in the United States, one in South Africa, and one in Australia.

And we're looking very insistently now into this specific market, and this region, so we're trying to create our pathway and viability into this market, and also looking into key locations inside this region. So what we want to do is, we want to bring this technology very near to the entire industry, so we can make the supply chain much more efficient, and create not only the environmental and economical impact, but we also want to create a social impact. So we look in to a triple-bottom-line approach.

Zulema Sanchis

That's great. So you mentioned regulatory approvals, when it comes to challenges expanding into new markets. I would like to shift now the question to Hussam. Large-scale developers like ROSHN—for me, and I think for all of us—have a massive influence on setting the standards, when it comes to materials, when it comesto sustainable modern methods of construction—you know, the way that you want the contractor to build, right, that aligns with your vision.  What has been your biggest challenge the challenge in integrating these sustainable materials and methods into your developments?

Hassam Ali:

Thank you, Zulema, it's great to be here. Before we start, I’d like to shed some light on the spectrum that is known as modern methods of construction. So, MMC is a term coined in the UK, and it basically describes seven major categories of construction methodologies, and for all of them, their primary purpose is to render the construction process more efficient and, of course, more sustainable.

So in these seven buckets, you know, you start on that spectrum with 2D panelized systems, 3D full volumetric solutions—they might be fully finished or partially finished in a factory setting. You have additive technologies like 3D printing. And one of the buckets is of course optimization of existing methodologies, and that could literally mean optimizing even traditional cast in situ construction. For example, when you introduce green cement to that building methodology that's cast in situ, you're optimizing that, you're rendering it more environmentally favorable, and so on.

So as I said, modern methods all serve the primary purpose to render things more efficient on the site:  so, how can we build faster; how can we build with less labor on site; how can we build with less environmental impact; and so on. So the three primary benefits to sustainability is, first of all, we're reducing wastage. There's a school of thought that says there is a 30% to 60% reduction in waste obtained. Then you also have carbon footprint reductions— because most of these 7 categories that I described to you, they're primarily off-site based, so you have a manufacturing element to them, where you pre-manufacture as much as you can of the building assets in a factory environment, and then you ship it to the site. That process by itself saves you a lot of transportation costs, environmental impact, and soon. And finally, the construction timelines. When we reduce construction timelines were up to 50%, you know, you have less environmental impact, less pollution, less disturbance to the immediate environment around the construction site, and so on.

But to go back to your question, Zulema, the biggest challenge is, you know, which comes first, the chicken or the egg, in a local supply chain landscape that is pretty much not as evolved as mature markets—like, you know, Southeast Asia or the FarEast or the UK market, for example. I think the best way to go about that is to have a collaborative framework where government works with the private sector, you know? So I come from a real estate background. What we're doing very busy doing in ROSHN is building the foundations of more sustainable methods of construction and delivery. So we're building from the ground up. We're looking at the way we design. We're looking at design efficiencies. We're looking at green cement, and introducing green cement, and so on. But we also need the support from top down—it takes two to tango, you know?  

There is a lot of traction in the in the market. We're hearing a lot of, you know, MOUs and a lot of big joint ventures coming online, and I know that there are a lot of companies that are localizing now their green cement production in SaudiArabia. So I think within a couple of years we'll be hearing wonderful stories about that picking up. — Hassam Ali, ROSHN

There is a lot of traction in the in the market. We're hearing a lot of, you know, MOUs and a lot of big joint ventures coming online, and I know that there are a lot of companies that are localizing now their green cement production in Saudi Arabia. So I think within a couple of years we'll be hearing wonderful stories about that picking up.

Zulema Sanchis:

So just to summarize: you want, obviously, the support from the government showing that you're leading the way towards— like, this is the way that the country should be keeping the construction. But also, I will say, are you the chicken or the egg? So ROSHN for me, I imagine, is the chicken. So for me, ROSHN should be the one saying, like, ‘No, no guys:  this is how we want to build.’  Therefore, the contractors—and now I'm going with you, Fahad—should kind of comply. When I talk to governments, and they always tell me the same: ‘We cannot impose if the supply chain is not ready.’ So it's a vicious circle, right?  One is passing to the other and no one takes the lead, yeah? Great reflection.

So for me, [the developer] should be the one saying, like, ‘No, no guys:  this is how we want to build.’  Therefore, the contractors... should kind of comply. When I talk to governments, and they always tell me the same: ‘We cannot impose if the supply chain is not ready.’ So it's a vicious circle, right?  One is passing to the other and no one takes the lead, yeah? — Zulema Sanchis, Accuracy

Fahad, let's wear the contractor hat for a minute. Are contractors prepared to actually shift towards sustainable materials? What are the setback, and what will help to drive large scale adoption? That's a question that I really want you to be as specific as possible: Are you ready or not?

Fahad Siddiqui:

Well, first of all, I want to thank you, Zulema, for hosting all of us, and for an amazing panel. And thank you, everyone [inaudible] for attending on such a cold morning in Riyadh, coming out for such a good cause, which is very close to our hearts.You know, profitability is one thing, and then there is doing something that for the generations to come, that will never be able to pay you back, is something that really is above legislation, is above profitability, is above, you know, balance sheets and P&Ls. It's a beautiful initiative, so I want to thank Construction Week for that.

Coming to your question of the supply chain, and who has to go first, as my brother Hussam said, it actually is the chicken and the egg.  Because if you think about it, why, as a contractor—and you told me to wear the contracting hat—why would I be building for a developer, a building that is green, increasing my cost?  The data from the United States Green Building Council website says it costs about 8% to 12% higher to construct the green structure, as opposed to a non-green structure. So why would the contractor invest that extra money when there are no tax benefits, or rebates, or preferential treatment in the tender, or time relaxations? Give me one good incentive for the contractor to invest that extra in there. And then the developer will say the same thing: so if ROSHN is a developer, and Retal is a developer, ROSHN will say, ‘Why am I spending that extra 10% and Retal is not?’

This is where we need to think of sustainability as a bigger vision. Because sustainability is not something that's going to pay you after one year or two years or one week or two days. The vision of Saudi Arabia, as the Crown Prince His Royal Highness Prince Mohammed bin Salman has clearly stated, that we have a vision until 2060 to be Net Zero. So that's the canvas we need to look at with sustainability, and we have to understand that, yes, it does make financial sense. It is a hard decision to take today, but the data from University of California, from USGBC, from LEED websites—pick it up and check it out—the LEED certified buildings or BREEAM, or EDGE, or whichever certification you want to follow, they actually save you, just like Hussam and Jose said, 30%on your energy efficiency. I don't want to get into detail about the numbers and chemicals and algorithms of how that happens. But just the design of these sustainable structures is maximizing the use of sunlight, for example; aredoing water conservation, or actually reusing the water, harvesting the rainwater, and then using it in your flushes and irrigation systems, so you can reduce your water consumption by 30%. So that is commercial savings, right? That's what we're talking about.

It's a hard decision, but somebody has to take it. As one of my mentors, Cody Sanchez, always says: it's hard, you know, being obese is hard. Going to the gym is hard. Being miserable is hard. You know, going out and getting over it is hard. Destroying this planet is hard. Protecting the planet is hard. Which hard do we want to choose? — Fahad Siddiqui, AMAQ

So why would the contractors, the developers and the contractors, need to team up and collaborate? Like these conferences give more of the information and pass the trends down to the industry leaders, to sit down at the table and take a decision on this. It's a hard decision, but somebody has to take it. As one of my mentors, Cody Sanchez, always says: it's hard, you know, being obese is hard. Going to the gym is hard. Being miserable is hard. You know, going out and getting over it is hard. Destroying this planet is hard. Protecting the planet is hard. Which hard do we want to choose?  This is the decision that, somewhere, sanity must prevail, and we need to come up as an industry, as a collaboration, as one joint venture between contractor, developer, and the government, to be on the same page and choose what hard do you want to choose?  So I really want to appreciate everybody that's in this room today because you guys are here not for yourselves, but for generations that are going to come 40 years after, probably, we've all died. So hats off and an applause to everybody that's in this room.

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Zulema Sanchis:

Great answer. But, actually, are the contractors ready or not?  [Laughter] OK, well, look: you mentioned the big elephant in the room, which is the cost, right? And you and everyone talks short-term cost instead of long-term vision, as you mentioned. Jose was sharing with me late yesterday, when we were catching up, about a case study that they did of RESIN8™, which is a very concrete product concrete that is in the market right now, that is working in many other countries, right? So he did a case study—maybe you can develop that now—in ROSHN.  So how much cost are we really increasing? Are we talking in 5 or 10%, or are we talking marginal cost increase? Maybe you can expand a little bit more because I would like to have your views on this:  If he tells me that it's a marginal increase, will the developers, will the contractors, accept that marginal increase and then go for it?

José Barquero:

Well, I wanted to bring in several concepts from the comments that my fellow panelists have been talking about. First of all, the market mentality is shifting. It's changing. But we also need to look, when we talk about a larger scale, we need to look about the improvement, in our case, and the long-term value proposition, in our case of RESIN8™. So long term is very important, right? Because when we talk about our product, we talk about building much more resilient and durable and energy efficient infrastructure. So we need to understand that it actually complies, and it brings value added that's really important. 

The other thing is, collaboration was mentioned. Collaboration is also part of what we do in our DNA. It's part of our name: CRDC means Center for Regenerative Design and Collaboration. So we collaborate with several industry leaders. Cemex is one of them. We also officially—I'm going to share that—this year we're going to commercially scale a new product called RESIN8™ CORE. Just to explain a little bit: we use RESIN8™ as a filter, and we use the fumes from the cement industry, we extract the CO2 from the fumes, and we get RESIN8™ CORE. And RESIN8™ CORE is quite different, from a commercial viability perspective, from RESIN8™, because RESIN8™ replaces the natural aggregate in some portion, and RESIN8™ CORE is an additive that actually brings a very high percentage of improvement on resistance for concrete. So, we are also collaborating with a company called Progreso—it's a very well-established cement company in Latin America that has been buying up the capabilities of Cemex throughout the region. We are going to scale up with them, and also with PA Consulting, who co-developed this product. So collaboration in general is very important.

[W]e did a case study... [a]nd just to keep it very straightforward, it only represented an increase in the cost budget of 0.11%—and we're talking about 2,505 homes—so it's a very marginal increase. — José Barquero, CRDC Global

Also, as I mentioned, there are different certifications and regulatory frameworks. Like, if we look into ESG goals, companies are really taking a deep, specific look into the benefits of these materials, because they are looking for materials like this—recycled content materials, low carbon materials—just to comply with their reports and in different concepts. In regards to the case study, we did a case study based on Sedra Phase Four that ROSHN is developing.  And just to keep it very straightforward, it only represented an increase in the cost budget of 0.11% —and we're talking about 2,505 homes—so it's a very marginal increase. But I also agree with my fellow panelists. When we talk about government, when we talk about financial incentives, that's really important just to try to close that gap, at least in the beginning, to incentivize more use of recycled content materials and low carbon materials.

Zulema Sanchis:

Great, so it's marginal. Now the question back to you guys, yeah? Just to summarize: this marginal 0.11% is, I will say, it's nothing compared to the amount of money that we are spending, isn't it? I don't know if you agree or not, but if I tell you this is the increase, will you then say, or will you then comply with, ‘OK you know what, I'm going to invest on this because my development is going to be greener, and in the long term it's going to be more cost efficient.’

Fahad Siddiqui:

Zulema, look, I fully agree with what Jose said, because in Saudi Arabia right now there is are 11,078 LEED-certified structures. AMAQ has built four of them, and the fifth one is ongoing. Our engineers that are building that are here in thisvery room, if anybody wants to have a chat with them, in terms of cost. There is a data that is coming from universities and global organizations, and there's data that I have in house. So absolutely agree with what Jose said: there is not a huge difference—I would say 1 to 2% versus traditional construction. We're building those projects for one client and similar project for other clients, so I have raw data with me, where it fully complements with what is being said.

That is a myth that needs to be broken, about green building and green construction being expensive. It's actually not expensive. If I put it into an analogy: if you want to eat a Big Mac right now, you'll be very happy. But the data does show that, down the line, in a few years, you'll be spending a lot on your medical bills. If you want to go for a kale salad: yes, you might be spending a little bit higher right now, but data shows that you’ll be spending less on your medical bills later. That's exactly, as a human body, is what you need to look at the building itself. -- Fahad Siddiqui

That is a myth that needs to be broken, about green building and green construction being expensive. It's actually not expensive. If I put it into an analogy: if you want to eat a Big Mac right now, you'll be very happy. But the data does show that, down the line, in a few years, you'll be spending a lot on your medical bills. If you want to go for a kale salad: yes, you might be spending a little bit higher right now, but data shows that you’ll be spending less on your medical bills later. That's exactly, as a human body, is what you need to look at the building itself. If you're going to invest that—if you're trying to save that 2% today, and be happy about it—you're not going to be saving that 12 to 15% on the operational cost of that building annually, and then 40% ROI and the whole lifespan of the building. So until and unless we think of these things like that, we're never going to be able to come up with the decisions on whether to go green or whether to stay traditional. 

Hussam Ali:

I just wanted to, you know, as a kind of feedback to what the my two colleagues have mentioned about the additional cost to the developer.  You know, I'm just going to rephrase it or reframe it in a different way. You know, 1%, 2%, it's all the same: it's additional, incremental cost, and it somewhat, you know, compromises your IRR, or return on investment, as a developer, and so on. But what I want to highlight more is that there's always going to be that kind of cost hump that developers have got to go over you know on the way to scaling up that technology locally in Saudi Arabia, you know? At the moment, there might be a couple of green cement producers in Saudi Arabia. But probably in 10 years, they'll probably be 100 or 1000 of them. And with time, and patience, and building up that kind of production line and scalability, the price point comes down. And then, you know, you do look at the long-term reward. And as a developer, I just want to add, that we don't look just at cost. We look at the overall value that this is bringing to us, especially for assets that we own and operate as ROSHN. So we look at the, you know, the lifecycle value that this introduces in terms of energy efficiency, energy improvements, you know, the cost of cooling, and so on. So you know, that's just a different perspective of looking at things.

Zulema Sanchis:

Yeah, great perspective. I mean, of course, costs often coalesce at the first barrier, but in fact, and indeed what you said, that the developer is looking at more holistic view, right? And just following up on you, Hussam. Can we discuss the latest design trends in giga-projects aligned with the efforts to reduce this carbon footprint?

Hussam Ali:

I believe you're all aware that the major trend in the last decade or so is, you know, developers are looking at more energy-efficient cooling systems, you know. We're looking at better wall systems, you know, better efficiency, you know. But I think one of the things that's most overlooked is the whole move—at least especially in the giga project lens—is the move towards off-site manufacturing.And beyond off-site, I think you're aware of, with off site you're moving that construction process to a more safe indoor environment, where you're doing things more efficiently, right? You're using less labor—we have one of the lowest labor productivity in the world here in the GCC region. So that movement towards factories will translate to a lot of efficiencies and from which we can reap the rewards.

Another design trend that I want to talk about is the whole, kind of, parts approach to designing and delivering massive projects, right? If there's a small developer working on a 100-unit, residential unit project, or a small skyscraper, it's very different than looking at a program or a large portfolio of assets that have to come online within the next 10 years. So the way to do it—I'm very passionate about this—is the kit of parts. It's basically establishing a Lego set, if I can simplify the discussion, you know, that predictable Lego set of 10s of thousands of components. Each component is known, so you're introducing a lot of certainty, repeatability, commonality, standardization. Standardization is extremely important, right? So from a sustainability perspective, you know, the kit of parts approach is very ideal, because we know every component’s carbon footprint, and the environmental impact becomes more known and more certain.

I'm going to give you a very simple example. If you look at this phone, you know, the apple phone, this was designed using a kit of parts approach. There's…not all of the parts are unique; some of them are bespoke in every model that you get. But in terms of constructing a house, you know, when you design and build a home traditionally, not using a kit of parts—you're using a bespoke approach; let's say it's your dream home—if I were to ask you what would be the carbon footprint of this home, you would not know where to start, right? But in a kit of parts approach, you know that these parts, that's the product type, that's the environmental product declaration form that I have, that I've developed, and, I mean, fine-tuned at every year.  So that kind of development becomes much more predictable in terms of carbon footprint, and I think that's where major developers and large developers need to head towards.

‍Zulema Sanchis:

You know, it’s interesting how you started the answer by basically focusing that the design is purely focused on the operational carbon, right? The building is going to behave in the long run. I always struggle with the fact that no one talks about the embodied carbon, which is how we build the building. I will say, if I compare the two, everyone is looking at the operational carbon, yet embodied carbon is not looked at, and that is a major, I will say, gap in the industry. And that's why products like RESIN8™  could help to, kind of, balance operational carbon and embodied carbon. The other thing that you mentioned, and I really like, is like this controlled environment, right? Basically you are bringing lean manufacturing into construction. I'm a lean manufacturing girl, by the way. I spent 10 years doing lean manufacturing and, literally, it is that repeatability, standardization, removing the seven wastes, you know? We all know about it and I'm going to— I really like the answer, by the way.

But you know, I think there is more to say in the operational—sorry, in the embodied carbon. I wanted to come back to Jose, just for one second, and I wanted to keep it very brief due to the time. I know that you are partnered with Cemex. Cemex is the Mexican—we all know Cemex, right?—the biggest concrete manufacturerin the world. And I would like you to maybe expand a bit on the partnership that you have with Cemex, because when it comes to the cost, Cemex is actually making, or leading the way, you know, to say, like: ‘You know what? I'll take this-and-this increasing cost, but my product will be much better in the long run.’

José Barquero:

So first of all, I'm about to close a partnership here with ROSHN, because it is, you know, your answer was very overwhelming. It was not what we usually hear from a developer. So, Cemex. They are industry leader and they’re partners and they…these types of partnerships, they actually help us to accelerate the adoption of products like RESIN8™ into markets, because it's just connecting the product into their supply chain and production processes. So that helps a lot. Cemex is one of several examples I can give, and it's also fair to say that RESIN8™ has also been proven in very large-scale projects already, so I can share a lot of information.

Zulema Sanchis:

I just wanted to highlight the fact that players like Cemex, industry leaders, are recognizing these types of, you know, new technology. They wanted to jump into it before everyone else, right? I think Cemex in the region is also expanding quite a lot, so that will be great for you guys. OK, last topic of the panel will be barriers to scale up. Now touching on the same, Fahad, I wanted to go to you for—contracting hat, please—we always hear from contractors that they struggle with material availability and supply chain consistency, you know, while integrating these greener alternatives. What will help ensure more reliable adoption from you guys?

Fahad Siddiqui:

Definitely supply chain is a challenge. Not just in terms of the material availability; even at the academic level of the consultants or the contractors available to build infrastructure, there's a scarcity because it's a trend that is still building up. I always say this on panel discussions where we’re invited, or closed circle discussions, that there is a lot of talk and a lot of noise about sustainability, but the truth is that there's only 185,000 certified green structures according to LEED, 500,000 according to BREEAM. So we are at less than 1,000,000 despite all of this noise. So something is misaligned somewhere. I mean, 49% of the countries don't even have a green building code. Saudi go to urs in 2021 with the Saudi Green Initiative announced by the Crown Prince, andI would second what Hussam said about modular construction and using AI and technology metaverse, augmented reality, and combining all of that with blockchain technology to reduce the inefficiency. So you can have a very nice building and call it sustainable, but if it has 1000 square meters worth of space doing nothing, I wouldn't call that a sustainable structure, because space optimization is a key role of if you want to call that structure sustainable or not.

So developing things in a factory environment and then shipping them off—digital twinning and bringing them off site—reduces, in terms of design, when using metaphors or digital twins reduces the variations and variation is lost efficiencies. Researching earlier in the year, I saw that construction industries waste about $1.5 billion a year in lost efficiencies due to non-utilization of these technologies, where manufacturing has really scaled their game up in terms of adapting to technology, construction has not. $1.5 billion is a virtually every year that we're wasting, and then we want to call ourselves sustainable. I met people here who are not from the construction industry, so I want to keep it in as simple words as possible for them to understand. I would want to knowhow many people in this room are consultants that are supporting people for LEED certifications or sustainable certifications of any sort. It wouldn't be many, because there are consultants that we can count on our fingertips.

I saw that construction industries waste about $1.5 billion a year in lost efficiencies due to non-utilization of these technologies, where manufacturing has really scaled their game up in terms of adapting to technology, construction has not. -- Fahad Siddiqui

So, yes, not only is the material availability a scarce resource at the moment, but there's also the academic challenges of not enough contractors, not enough workers, not enough consultants, who are able to take this whole thing forward. And that is why there's a cost impact on that, because, you know, demand and supply, it’s a simple rule. So we do source a lot of materials that are sustainable, but at the same time, there needs to be much more education in the industry where as a whole, in terms of design, as well as build, on how to take this thing forward. And that's not going to come, as I always say, without a mass legislation from the top. It has to be from top down: either we do it, or the law comes where you will be then mandated to do it. But it has to be done.

Zulema Sanchis:

I agree, and a great finisher, liner, I would say is, is for you, Hussam. How do you envision this collaboration— to mention, all of you, mentioned collaboration—this is the collaboration that we can we can put the efforts on. So how do you envision this collaboration between governments, manufacturers, and contractors in accelerating the adoption of more sustainable modern methods of construction?

Hussam Ali:

I think I believe everyone has a role to play, you know? I mean. as I said earlier, and as my colleague Fahad had mentioned, you know, the government is doing good work. They've established the modern building initiative— I think you guys are aware of that, under MOMA, and what they're doing is very good work in terms of funding and financing and assisting manufacturers, both locally and from abroad, to set up shop in Saudi Arabia and establish and certified technologies, by the way, that they're fit for us locally, and so on. I think they're also looking at green concrete.

The other thing that government is doing should be doing also, or increasing that workstream, is the policies and the regulatory framework, you know, I've always mentioned that, you know, there could be a mandate, for example— I mean, it's not a foregone conclusion—but there could be a mandate for residential developers, for example, to deliver 50% of their homes using off-site methodologies, right? That doesn't mean that this home is going to be completely modular home, built off site, but it means 50% of the components of the home should be pre manufactured. I think we're all, we're almost there. I mean, as ROSHN—and 35% of our homes are now done in a, you know, precast factory—you know, at an offsite location, we're looking to increase that steadily towards 70% by 2030.

But I think also in terms you mentioned earlier—the contractors and manufacturers, and manufacturers, you know they can't look at increasing their production capability bringing on Saudi talent and making sure that the talent is also there to man these manufacturing facilities, you know, they could be looking at PPP— public-private partnerships. I think there's a lot of traction and movement in that front these days. And finally, you know, contractors—and, sorry, just to go back to— manufacturers can also improve their marketing skills, by the way, maybe not for materials, but for construction methodologies, that's been one of their gaps in the last 10 years, is that they haven't marketed their products in a way that's favorable by the general masses, and by home buyers, and so on. I think that's where we need to, they need to, do more work.

Contractors,I believe, they have to be up-skilling. They have to be looking at how can we do things better, what is really in demand, especially in large projects or giga projects, you know? It's that movement towards more digital transformation, more [inaudible] adoption, you know, upskilling their workforce and positioning them as the next generation assemblers, because that's the role that contractors are going to be taking when we shift from traditional to more modern methods of construction. It's the role of the contractor moving from a general, traditional contractor to a more of an assembler on site. And that takes more skills than, other new skills that are coming online, new equipment, and new capabilities, and so on. So they all have to play their part, and I think we're all headed towards the same goal, you know, the Vision 2030, the goals on sustainability, the goals on industrialization, and so on. So I think we're going in the right direction.

Fahad Siddiqui:

I think building on—sorry, Zulema—while we’re talking about recommendations, I would think that, really, if legislation could come in and support the contractorsand the developers, as well. For example, they can give, like the manufacturing industry, for example, has over here, the residential costs for contractors are12,000 rials per year per guy, right, per individual, but the manufacturers have it for 700. So if the government can support, come in and say, ‘Look, if you're a contractor or builder, you're going to build this many green structures a year, or that much percentage of your revenue annually has to be towards green building, or green,’ then automatically these 244,000 registered contractors in Saudi Arabia are going to shift towards—I mean, we are one of the 244,000 and we’ve built 4 structures. So imagine, we’re the 0.0001% of contractors that are adapting to this whole green thing, right? But if you come up with, or allow them some relaxations in your VAT—not reducing the amount, but giving them flexible payment terms. I mean, incentivize them somehow.

This is all under discussions with OMBRA and different organizations that we sit with. So what's going to happen eventually is, it’s not going to affect the balance sheet of the government—you're still getting it back—but it's going to help the contractors and the builders towards building sustainable structures, which is then, eventually, going to come back and feed the residents of Saudi Arabia and the citizens of Saudi Arabia in the long run.These are the little things that, you know—there are many more ideas. You can allow them preferential treatment in the tenders. You can allow them preferential treatment in their income taxes—right now, you're paying 20% make it 18%, if you build 80% of all your structures annually as green.  You're shaving 2% there from the income tax, but the contractor will be investing that into your economy again, building a safer future for your children to come. 

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Zulema Sanchis:

Great. I'm conscious about the time.  Any time for questions? Yes? Come on guys we have a great lineup of panelists.

Audience Member:

[Inaudible] … It's difficult for [the industry] to transform. So what would be, for you, the number one solution that we could all take away, to talk about, to help [the construction industry] not fall back into the old habit of judging everything based on their own cost?  And then, the second point, is how do we lock in the good initiatives—when, you know, you have a success story somewhere— and I think,Jose, if I understand well what you are doing, you know, it would be a no-brainer: you are directly adaptable for the market; you are bringing a new solution that works. So why not use it? Why can we not lock in solutions like that and make sure that it's continuously used, so we're not inventing the wheel every time  and falling back into thesame old habits?

Fahad Siddiqui:

Thank you very much for the question. It’s a great question. I think the reason why they're not adapting to it, honestly, is because there is a lack of government—or globally, governments—to mandate the contractors and the builders to do it right.  Now it's still considered as a luxury—which it is not, but that's the perception that we have for green buildings, and that is what pays you later on. Because the buyer of your apartment or the villa, for example, in ROSHN, knowing that it's a green structure, has that perception, and he'll be happy to pay 10% to 12% higher for that villa because he knows: ‘If this is being developed with the care for something so special such as sustainability, and green, and future, then I'm sure that they haven't compromised on quality elsewhere.’ That's the perception that actually pays you at the end of the day.

And how we can continue building on this? I think is it has to be both by global governments, as well as, I think, the emotional factor needs to be there, as well. We need to teach school kids about how important sustainability is. I always say that—we are Muslim country, and our Prophet Muhammad [inaudible] has a hadith where he said, back 1500 years ago, that if you have a plant in your hand and you're about to plant it, and the horn gets blown for the day of judgment, if you still have time to plant it, then plant it. That's the aggression and the attention to detail and the intention that you need towards, I mean, planting is the easiest way to reduce carbon emissions and move oxygen in the air. But that's just one thing. I'm just saying that people need to understand that it's not just corporate social responsibility. It's also our faith, our religious responsibility. And then if you do that from 8:00 AM to 6:00 PM every day, you make the money, you get called a good guy, and you still go to heaven. So it's a win-win.  

José Barquero:

That's—pretty fast—I just agree 100% and I think that the one transformative change that we can get, is that of mandating minimum sustainable requirements in construction tenders. They can prioritize the use of recycled content materials and low-carbon materials. There's also a very long discussion— you know, and very interesting—around education, that we actually go through in our case. We have an educational curriculum for going to schools and teaching about regeneration and being part of the ecosystem.  That's really important.

Hussam Ali:

These are very good quick wins. When you elicit regulatory support and government incentives, you know, that's a win-win situation. And last but not least, is building that cultural shift, right? Especially on modern methods of construction, you know, as the gentleman said, you know, by the way, make sure that contractors are changing and you know sticking to it. I think it's making that cultural shift of positioning themselves as Next Gen, forward thinking, progressive. I think that's a win-win situation for them, to win other tenders, you know. So changing the mindset of the culture is very very important as well.

Zulema Sanchis:

That’s very important. As well, and just to finalize and to close for me, it’s just this: we talk about sustainability all the time. We talk about modern methods of construction. It should be normalized by now, right?  After like, I don't know how many years we have been talking about these ‘’modern’ methods, for me they are not modern anymore—they are methods of construction.  Sustainability should be part of, and embedded into, the organizational mindset.

Hussam Ali:

I agree.

Zulema Sanchis:

So thank you very much guys. It was a pleasure.

All:

Thank you.

[Applause]